CPE for employees of registered persons (ERPs)

Who counts as an ERP?

An ERP is an employee of a registered person. For CPE purposes, registered persons are the financial institutions listed in Part 1 of Schedule 4 of the Capital Markets and Services Act 2007 (CMSA). They can carry out certain regulated activities, called permitted capital market activities, without a Capital Markets Services Licence. They are:

• Licensed banks, licensed merchant banks, licensed Islamic banks and licensed finance companies
• Licensed insurance companies and registered takaful operators
• Bank Kerjasama Rakyat Malaysia Berhad, Bank Simpanan Nasional Berhad, Bank Pembangunan Malaysia Berhad and KAF Investment Bank Berhad

Who supervises ERPs?

Bank Negara Malaysia (BNM) supervises these registered persons. It checks that they comply with the CMSA's investor protection provisions, that the employees carrying out permitted activities are fit and proper, and that the firm keeps a register of those employees. The register must be updated whenever an employee starts or stops carrying out permitted activities.

An investment bank is not a registered person, because it may be licensed as a Capital Markets Services Licence holder for all eight regulated activities.

Fit and proper and exam requirements

Under the Guidelines on Investor Protection, issued jointly by BNM and the SC, an ERP meets the fit and proper standard through three things: minimum fit and proper criteria, examination requirements and CPE.

• Minimum criteria include not being an undischarged bankrupt and having no conviction for fraud, dishonesty or violence, or under banking, securities or insurance laws.
• ERPs must pass the relevant examination modules before carrying out permitted capital market activities. SIDC runs the SC licensing examinations that ERPs sit.
• You only need to pass once, but a result is valid for two years from passing. If you do not start permitted activities within that time, you must pass the modules again.
• Individuals with distinguished service, including at least 20 years of relevant experience and senior management experience, may apply to BNM through their employer for exemption.

How many CPE points do ERPs need?

All ERPs must obtain 20 CPE points in a year, on or before the end of their cycle period, to keep carrying out permitted capital market activities. This is the same 20 points required of CMSRL holders. Excess points cannot be carried forward to the next cycle period.

As with CMSRL holders, ERPs are grouped by experience. Category 1 covers those with under 10 years in the capital markets industry, and Category 2 covers those with 10 years or more.

How ERPs can earn CPE points

• CPE-approved courses: physical or structured online, with no limit. You can earn all 20 points from courses alone.
• CPE-recognised qualifications: 10 points for each module passed and 20 points when the qualification is conferred. Qualifications obtained before you became an ERP do not count.
• Speaking, lecturing or publishing on capital market topics outside your job duties earns points with no limit.
• Committee roles in CPE-approved industry bodies earn up to 10 points. Structured coaching and mentoring earns up to 10 points, for Category 2 only.
• Self-directed learning: up to 5 points from reading and up to 5 from non-structured online learning.

How ERP CPE differs from CMSRL holders

• Licence: ERPs do not hold a CMSRL. Their status comes from their employer being a registered person.
• Deadline: CMSRL holders count CPE to their licence anniversary date, while ERPs count to their cycle period.
• Supervision: BNM supervises banks and other financial institutions that are registered persons, including whether their employees are fit and proper.
• Course registration: give your ERP number, rather than a CMSRL number, to the training provider so your attendance is recorded.
• The points, learning modes and caps are the same for both groups.

What employers must do

• Registered persons determine their ERPs' training needs, monitor CPE compliance and attest to each ERP's fitness and probity. ERPs share responsibility for meeting the requirement.
• Registered persons submit a semi-annual Fit and Proper Compliance Report (Form 6A) within seven business days after the end of each reporting period, covering ERPs whose cycle period fell in that period.
• CPE training records must be kept for seven years and made available to the regulator on request.
• A registered person can apply to SIDC to become a CPE-approved training provider before running its own CPE-approved courses.
• Failure to comply with the CPE requirement may result in regulatory action by the relevant regulators.

CPE courses for bank and ERP teams

Ogos Learning runs SIDC CPE-approved courses for Capital Markets Services Representative's Licence (CMSRL) holders, with attendance uploaded to SIDC's CPE Tracker. ERPs give their ERP number when registering for a CPE-approved course.

Founder and principal trainer Jin Yoong Chong, CFA, is an HRD Corp accredited trainer who has run accredited CPE courses for capital market licence holders since 2010. He has served as President of the CFA Society Malaysia and authored the PKMC Module 2, 3 and 4 textbooks with AICB.